The big right-wing lie. No matter how many times President Obama says he‘s a Christian, there‘s no beating back the drumbeat from the right that he‘s a Muslim, or something like it. Check out this graphic moment from Fox News of a Frank Luntz focus group with Republican caucus voters in Iowa.

MATTHEWS: Wow, that‘s 10 raised hands out of 25 Republican caucus voters, 40 percent. Do they believe this nonsense? Apparently. Remember, these are the folks who pick the next GOP presidential nominee, the Iowa Republican caucus attenders. Republicans, religion and reality our top story tonight.

Plus: Suspicions confirmed. When all those Tea Partiers won in November, they threatened more trouble to the Republicans, we thought. Well, here goes. Tea Partiers helped vote down an extension of the Patriot Act last night. And Orrin Hatch is so fearful of getting primaried next year, it looks like he‘s crashed a Tea Party event himself last night.

Also, it‘s the right-wingers who always talk about freedom and liberty, so why are they lining up behind the old guard in Egypt and not behind the people in the streets, supporters in the square, in Tahrir Square? Could it because they see freedom as their kind or their way?

And return of the culture wars. Some Republican congressmen are stoking up the abortion fight. Whatever happened to all that talk about creating jobs?

We start with the big right lie. Josh Marshall‘s founder and editor of Talking Points Memo, TPM, and Bob Shrum is a Democratic strategist.

Well, Shrummy‘s come back with the bad news. I don‘t think even he was ready for this. And I‘m not (INAUDIBLE) Shrum—Luntz! What am I saying? What a confusion I‘m in here! Here‘s some Iowa Republicans in a focus group with Frank Luntz on Friday noon—or actually, Fox News Monday night, last night. (SIC) Let‘s listen.

LUNTZ: How many of you believe that here? Wow. You believe he‘s a Muslim.

UNIDENTIFIED MALE: Yes.

LUNTZ: And you think that‘s having an impact on what he says and does.

UNIDENTIFIED MALE: Fundamentally, yes.

UNIDENTIFIED FEMALE: Absolutely.

LUNTZ: Jack?

UNIDENTIFIED MALE: Yes, I do also.

LUNTZ: Now, do you understand the implications of what you‘re saying here, what the media‘s going to say about this group and about Iowa caucus voters in the future? You realize what you‘re opening up here?

UNIDENTIFIED MALE: His religious belief is liberalism. And you know, that‘s the most intolerant religion of all. There‘s no room for wiggle in there.

UNIDENTIFIED FEMALE: I do think it‘s quite possible he is Muslim, even though he says he is Christian. But I think that this type of rhetoric—he‘s waffling on both sides.

(END VIDEO CLIP)

MATTHEWS: Well, I don‘t know what we make of that, but a nationwide Pew poll in August found—that‘s the best last poll we‘ve got—they are not off base among Republican conservatives. Look at that, 31 percent of Republicans think President Obama is Muslim, 39 percent say they don‘t know his religion, which is a cute way out. That means only—that means 7 out of 10 Republicans wouldn‘t say the president is what he says he is, what he practices. Is the problem getting worse?

I want to go to Bob Shrum on this because we all grew up with that phrase “the big lie”—if you keep saying something over and over and over again, somebody‘s going to believe it. And apparently, the conservatives in the Republican Party, in fact, across the board Republicans, are buying this number. He‘s a Muslim.

BOB SHRUM, DEMOCRATIC STRATEGIST: Oh, sure. And look, Fox News reports, but they also propagate. And these folks live in an unparalleled universe of untruth and intolerance. They look at Barack Obama. He‘s a different—he looks different than—as he once said, than any other president we‘ve ever had. His father was born in Indonesia.

And I think this whole of his religion issue becomes a surrogate for a lot of other feelings that people have about the notion that somehow or another, their country is being taken away from them because the country is changing profoundly. There‘s a demographic reality out there. And what Richard Hofstadter used to call the paranoid style in American politics flourishes in times of big change and big challenge. So I think that‘s what we‘re seeing, but it‘s being consciously exploited.

MATTHEWS: His stepfather was born in Indonesia. His actual birth father was from Kenya. Let me go—what‘s going on here, Josh?

JOSH MARSHALL, TALKINGPOINTSMEMO.COM: You know...

MATTHEWS: I thought this would go away, but despite going to the prayer breakfast, despite protestations, perhaps—what does it take for him to demonstrate to some people—or is it just they‘re fighting words? Do they say it just to show they don‘t like him?

MARSHALL: I think there actually is an element of that, that some of these people really don‘t probably believe that, but it‘s what you say if you don‘t like Barack Obama.

MATTHEWS: Yes.

MARSHALL: But I do think, you know, the Muslim thing, the birther thing, these are—these all go together that he‘s not one of us. He...

MATTHEWS: Well, let‘s take a look at—a little look here, Bob. You can‘t see—oh, he can see it up there, too, on the screen. Here‘s Limbaugh and Beck last August, after that Pew poll came out. Let‘s listen to their jamboree of misthought here. Let‘s watch.

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Imam Hussein Obama! Mmm, mmm, mmm! I want to be fair, too. He probably is the best anti-American president the country‘s ever had. Obama says he‘s a Christian, but where‘s the evidence? Well, he went to Reverend Wright‘s church. Yes, but he doesn‘t—he says he didn‘t hear anything that was said in there. And by the way, Reverend Wright‘s church is a weird brand of Christianity. The Reverend Wright‘s church—black theology is what comes out of that pulpit.

GLENN BECK, HOST, FOX NEWS “GLENN BECK”: The easy thing is to say, I think he‘s a Muslim. I don‘t—I really don‘t. I think he is a Christian that Christians don‘t recognize.

LIMBAUGH: Some think he‘s a Muslim. I‘m just saying there might be reasons why some people think this.

MATTHEWS: This, I don‘t know what he is, I don‘t know what he claims to be, he‘s into some kind of black theology, it‘s not really Christianity, and maybe it‘s black Muslim really, it looks a little different but that‘s really what it is, Nation of Islam—all this clever, I don‘t know, maybe, and of course “Imam Obama,” that kind of language, Bob. I never heard anything like this...

(CROSSTALK)

SHRUM: Listen, it‘s fear, smear...

MATTHEWS: I guess you‘d have to go back to Father Coughlin and Franklin Delano Rosenfelt” and that horrible anti-Semitic stuff that went on back in the ‘30s. I don‘t think it‘s recent in American history, this kind of talk.

SHRUM: No, it‘s what Hofstadter talked about as the “paranoid style,” and it‘s fear, smear and innuendo that would have made somebody else, Joe McCarthy, proud. But look, the black church—and there‘s so many layers of bigotry in this. The black Christian church in America has been a powerful shaping influence on our history, was the point of the lance of the Civil Rights movement. It‘s where Martin Luther King came from.

Now, I‘d say that to Rush Limbaugh. I‘d say that to Glenn Beck. And I‘d discover they don‘t like him, either.

MATTHEWS: Yes.

SHRUM: There‘s something else, by the way, that ought to be said here, and Colin Powell said it on “MEET THE PRESS” eloquently the week before the election. Barack Obama‘s not a Muslim. He‘s been a Christian all his life. But what if he was a Muslim? I mean, are we going to start applying these kinds of religious tests in American public life?

MATTHEWS: OK...

SHRUM: That‘s what John Kennedy fought against.

MATTHEWS: OK. And it also is—I want to go back to Josh. It is part of this crazed way of looking at the situation in Egypt. It‘s all conflation, just like if somebody hits us from somewhere, we go hit Iraq.

MATTHEWS: Keep it confused. Islams are out to get—a billion of these people (INAUDIBLE) They‘re not all out to get us. If you start getting into that world, you have done exactly what al Qaeda, that small group, wants us to get...

MARSHALL: Well...

MATTHEWS: ... get totally focused on them representing a billion people. Then we‘re really finished.

MARSHALL: Yes, that would be very ill-advised. I mean, I think the key is here is that, you know, when people say—in 2011, when people say someone‘s a Muslim, it‘s not what it would have meant 20 years ago. It means, He‘s one of those people that got us on 9/11, that might be blowing up a plane. It‘s all coded language. And again, I think it‘s really of a piece with the birther stuff, about which there‘s just as little evidence.

MATTHEWS: Let‘s take a look at Frank Luntz here, asking that same focus group of Iowa Republican voters how Obama should handle the Muslim Brotherhood in Egypt. Now, this makes your point, how they respond. He asks them how—a particularly good question, by the way. It‘s a good question. How do we deal with the Muslim Brotherhood in Egypt? Let‘s listen.

(BEGIN VIDEO CLIP)

LUNTZ: How many of you think that he should not—that he should state clearly, knowing the implications in Egypt, there should be no outreach to the Muslim Brotherhood? Who agrees with that idea?

UNIDENTIFIED MALE: I would just like to see him be proud of America, represent America, our history.

LUNTZ: You guys agree with that?

(CROSSTALK)

UNIDENTIFIED MALE: I just want him to be proud of who we are and have the ability to point out all the positives that this country‘s represented as.

UNIDENTIFIED MALE: What do we have to be sorry about? He runs around apologizing, apologizing all the time. What‘d we do wrong? We prospered as a nation. We pay for things and we give relief to other countries.

(END VIDEO CLIP)

MATTHEWS: I don‘t know what to say. These people will not read the newspaper. They‘re not—these are tricky situations. We‘re trying to figure out what to do with those million people in the streets yesterday. Do we talk to some of them? Do we not talk to them? Do we let them all vote? Do we let the—push the Egyptians to have a real democratic election, or something that perhaps—I don‘t know what. It‘s very tricky. And these people just say, Well, act American, and don‘t apologize. What‘s that got to do with this? And the question, by the way, was, What do we do?

MARSHALL: Good point. You know, you see in those faces, there‘s a lot of hate and there‘s a lot of fear. And there‘s—I mean...

MATTHEWS: There‘s not a lot of newspaper reading in that crowd. I‘m sorry. They‘re not wrestling with the issues.

MARSHALL: There‘s also a lot of political leaders that are stoking that because keeping your supporters, not just opposing the head of the other party, the president of the United States, but fearing him and fearing him in a very deep way is powerful politically. And so there‘s a responsibility that goes all the way up the—you know, all the way up the chain across—you know, across the country.

MATTHEWS: You know, I think everybody likes to play innocent. We are not innocent. The United States has to make deals with different leaders around the world. Sometimes we make it for oil, Bob. Sometimes we do it to help Israel, our friend over there. We make all kinds of deals, and sometimes we make them with people who maybe shouldn‘t be head of those countries. Some of those leaders in that region are parasitical. We know that. They were put in there from outside. They weren‘t there—they weren‘t elected by the people.

For us to say that somehow all we have to do is love America and we can solve all our problems is not accurate. We‘ve got to think through these deals we‘ve made and figure out the right ones we‘re proud of and are essential to our interests, and then try to work our way through the tricky stuff. Your thoughts, Bob, last...

(CROSSTALK)

SHRUM: Well, I had two problems with what we just heard. One was the question. We don‘t get to decide whether Egypt is going to deal with the Muslim Brotherhood. The government‘s actually talked with them for years and years and years at the same time that they‘ve suppressed them.

Secondly, we don‘t run Egypt. And the president has actually done a very good job here, I think, of walking a very fine line...

MATTHEWS: Right.

SHRUM: ... trying to achieve change, but at the same time not go down into chaos. And when you listen to these people, you know why the Republican Party is going to fall off the far right edge when it nominates a presidential candidate in 2012.

MATTHEWS: You know, maybe we shouldn‘t have recognized China.

(LAUGHTER)

MATTHEWS: Just keep acting like they‘re not there. I don‘t know. I mean, maybe if we don‘t talk to them, maybe they won‘t be China.

Coming up: The power of the Tea Party. Tea Party Republicans in the House of Representatives defeated an extension of the Patriot Act, a total blow to the Republican leadership. They never thought that was coming. They‘ve got a problem with these people.

And Utah senator Orrin Hatch, who has a 90 -- I‘m sorry, the latest number 100 percent conservative rating, is so scared to death of the Tea Partiers right now—and by the way, he‘s hardly a RINO. He‘s 100 percent conservative—that he had to crash a meeting of the Tea Party people without invitation so they wouldn‘t think he was the enemy. But they still want to look at him, decide whether to dump him or not, like they did Robert Bennett. This is getting very dicey on the right. It‘s a dangerous place to be, on the Republican right. You got to be righter than the next guy.

MATTHEWS: Wow. We saw this one coming for a few weeks, another blow to Senate Democrats. Senator Jim Webb of Virginia won‘t be running for a second term next year. The Democrat, by the way, has a lot of fans in this operation. The Democrats squeaked by Senator George Allen last year after that “macacca” moment in 2006. Allen‘s already announced he‘s running for his old seat, so Allen‘s coming back and Webb‘s going away.

Possible Democrats who could now enter the race include former governor Tim Kaine and former congressman Tom Periello. But Republicans only need four seats to win control of the Senate, and with Democrats retiring in North Dakota and now Virginia, plus close matchups in Nebraska and Montana, they‘ve got a good shot to grab the Senate, as well as the House next year.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Last night, a vote on the Patriot Act in the House, a renewal of the Patriot Act, went down when House Republicans surprisingly lost 26 of their own members, several of those being Tea Party freshmen. And across town meanwhile, Utah Republican senator Orrin Hatch attended a town meeting to court the Tea Party Express as he gears up for a possible primary challenge on the right come 2012. So just how powerful is the Tea Party these days?

Matt Kibbe, of course, is president of FreedomWorks—that‘s the Dick Armey crowd—and Phillip Dennis is a Tea Party organizer down in Dallas. Gentlemen, thank you. Great Super Bowl down there in Dallas, I must say, Dennis—Phillip. Let me ask you, Phillip, the first question. Is Barack Obama a Muslim?

PHILLIP DENNIS, TEXAS TEA PARTY: I don‘t know. Does it matter if he...

MATTHEWS: You don‘t know! Here we go again! Here we go. What do you mean you don‘t know? He‘s a Christian!

DENNIS: Well, let me answer this. Let me answer this. If he‘s a Christian, I certainly don‘t like the brand of Christianity he went to in Chicago for 20 years with Benjamin Wright!

MATTHEWS: Well, wait a minute. Well, that‘s one of the—now, you‘ve just given me two answers. The first on is, I don‘t know of he‘s a Christian, he might be a Muslim. And then you switch over to you don‘t like what you see as a too-left African-American church. So which is it? Is he an African-American Christian or is he maybe, maybe a Muslim? Which is it?

DENNIS: It doesn‘t make any difference to me at all. As long as he would cut the size of government, cut spending and secure our borders...

MATTHEWS: So you change the subject.

DENNIS: ... I don‘t care what he is.

MATTHEWS: So you‘re playing this game. You‘re playing this game.

You are playing this game.

DENNIS: I‘m not playing any game. I don‘t know what he is.

MATTHEWS: You just...

DENNIS: Only he can tell you what he is.

MATTHEWS: Well, he said he‘s a Christian.

DENNIS: Well, then he‘s a Christian, then. That‘s fine. But you know, one thing that you can‘t deny—and I heard you guys ridiculing those people on the Rasmussen poll there...

DENNIS: Oh, I have a big problem with Islam. I think that it—they call itself (SIC) the religion of peace, when every day, it continues around the world to show itself to be anything but! So I think those people have a right—certainly, and it‘s understandable that they might have a problem that our president might be Muslim. Absolutely!

MATTHEWS: So do you think those Islamic countries should be allowed to rule themselves?

DENNIS: Absolutely, they should. I do agree with that. Yes, I believe that we shouldn‘t be involved in that. But I know where you‘re going with this is what‘s going on with Egypt...

MATTHEWS: I‘m just asking.

DENNIS: ... and I believe...

MATTHEWS: I‘m not sure where I‘m going. I‘m following you, sir. I‘m following you. I didn‘t know you‘d go in this direction of.—

DENNIS: No, all I‘m saying is that I see what happens worldwide ever week, with the terrorist events, the beheadings, stonings, all of these types of things.

And we have had 226 indictments for terrorism in the United States, and all of them have been Muslims. So, yes, I have a right to be concern about Islam, yes.

MATTHEWS: OK.

Let me go to Matt Kibbe, just to go around the corner here.

Matt, do you think the president is a Muslim or might be?

MATT KIBBE, PRESIDENT, FREEDOMWORKS: I think he says he‘s a Christian, and I take him at his word.

MATTHEWS: That‘s what I do, too.

Let‘s move on here with the Patriot Act. But I do see the problem here. And I think you‘re a classic member of that focus group, Phillip. I think, if you were in that focus group, would put your hand up?

DENNIS: I would you just say that he says he‘s a Christian, so he‘s a Christian. It doesn‘t matter to me. Like I said, I don‘t care what religion he is, as long as he will do the things that I would prefer he do, which is reduce the size of government, cut spending and secure the borders.

MATTHEWS: OK.

Let‘s take a look at this situation here with the Patriot Act. there‘s John Boehner, the speaker of the House, on radio in an interview yesterday. And he was asked if he‘s a Tea Partier. Let‘s go and see if he‘s one of your guys. Let‘s listen.

(BEGIN AUDIO CLIP)

BILL CUNNINGHAM, RADIO TALK SHOW HOST: Is John Boehner a member of the Tea Party?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I should be.

CUNNINGHAM: Are you?

BOEHNER: I don‘t know if I actually pay dues, but I‘m a big believer in the Tea Party. I talk to Tea Party activists all over my district and all over the country every day.

(END AUDIO CLIP)

MATTHEWS: Is that—is that—I guess we should ask if he‘s a Tea Party member, like is he a Muslim? I mean, he says he should be. He says he doesn‘t pay dues. I didn‘t know you had dues. I didn‘t think it was a dues-collecting operation.

Why is he sort of kissing around this thing and not really getting to it? Is he a Tea Partier as far as you‘re concerned, Matt Kibbe?

KIBBE: I think, if you look at where Republicans are right now, the Tea Party has essentially taken over the Republican Party, and they‘re talking our values, they‘re talking our issues.

And, ultimately, I don‘t think it matters to me if you belong to the Tea Party or the Tea Party Caucus. If you believe in freedom, if you believe in limited government and fiscal responsibility, and you vote as you say you want to and believe, I‘m in. I‘m with you.

MATTHEWS: But what do you make of a guy like Orrin Hatch, who has moved from—he‘s moved over to 100 percent Conservative Union voting record. And Lugar has also moved to the right. I‘m not just sure that‘s just the nature of the votes lately.

But I look at Hatch going to 100 percent and then showing up at a Tea Party.

KIBBE: Yes.

MATTHEWS: Is he just getting in line for the guys? Do you think he is just faking it or trying to act appropriate to your power, as you put it? You‘re in charge.

KIBBE: Well, he‘s definitely speaking to Tea Party issues right now and he‘s very nervous what might happen in the Utah caucus in his election coming up.

The bottom line for us is how people vote. The challenge for Senator Hatch is whether or not he can make up for the last 35 years with a new shift towards fiscal responsibility. That‘s what he has to persuade the people of Utah that he‘s going to do for the next six years.

DENNIS: So, no, listen, it sounds like it‘s primary time and he saw what his good friend Bob Bennett suffered by voting too far to the left the last time.

And, so, no, I mean, we—he has a voting record, and we have watched him for a long time. And it‘s up to the voters of Utah. But I know that the Tea Party certainly is looking at alternatives there.

And I believe you will see a lot of people, a lot of longtime, lifelong politicians that have been there for too, too long, that are looking to move far to the right and call themselves Tea Partiers at this point.

But this whole Tea Party Caucus thing, I mean, what happens when Olympia Snowe wants to join? What happens when Harry Reid wants to join?

What about a younger member like Lindsey Graham? He‘s got a—look at the numbers here now. Forty-two percent of the PPP poll down in South Carolina among Republicans say he‘s too liberal -- 45 percent say he‘s about right.

Is that in the sweet spot for you guys or not?

You first, Phillip Dennis. Is that good enough?

DENNIS: I find that—I find that surprising. I think the Tea Party is very against what Lindsey Graham has been doing and saying over the last six years. And he‘s cozied up to a lot of big-spending liberals on the other side and tried to pass through a lot of legislation that the people of South Carolina were not pleased with.

So, I would find that to be surprising. I would find the Tea Party to be much more against him. And I certainly expect him to face a primary challenger.

MATTHEWS: Would you—would you back Joe Wilson over him, Mr.—the guy who...

DENNIS: Yes.

MATTHEWS: ... said “You lie” to the president, the president lies.

Would you go to him, rather than Lindsey Graham?

DENNIS: I‘m not exactly sure of Wilson‘s voting record up to now, but if he were more conservative from a fiscal standpoint, absolutely.

MATTHEWS: How about you? How about you, Matt? You think you ought to dump some of these guys, like Hatch and Lindsey Graham?

KIBBE: Oh, I think Lindsey—Lindsey Graham has to go. He‘s—he‘s not only voted against fiscal responsibility, voted against reining in government, but he‘s really approached the Tea Party with a great deal of disdain, and even insulting the voters of South Carolina.

So, I do expect a challenger. And, frankly, I would be surprised if Lindsey Graham doesn‘t do what Jim Webb just did, because by the time he gets to his election, he‘s going to be looking at some very difficult numbers.

And as for the rest of these guys, yes, you have got to look at Utah, you have got to look at whether or not we have a viable, more principled alternative to Senator Hatch. And, if we find one, we‘re going to be with that guy.

MATTHEWS: Up next: another Republican running scared from Sarah Palin, Rick Santorum. Well, he tweaked the former Alaska governor. Now he is doing some backpedaling. It‘s not—it‘s not smart to mess with Mother Nature, I guess.

RICK SANTORUM ®, FORMER U.S. SENATOR: I—I don‘t know. You know, I have a feeling she has some demands on her time.

(LAUGHTER)

UNIDENTIFIED FEMALE: Right.

SANTORUM: And that—and a lot of them have financial benefit attached to them.

(END VIDEO CLIP)

MATTHEWS: I think Rick wished he had those options.

Anyway, he‘s saying Palin would rather make money than stand for the cause? Fighting words, words that Santorum wasn‘t prepared to stick behind, however. One day later on Twitter, he linked to the Politico report on his comments, writing—quote—“This article is garbage. All I said was she‘s very busy, period. It‘s a reporter trying to create something out of nothing.”

Well, something out of nothing? Actually, something that is on videotape. Twitter vs. videotape? Videotape wins. You just saw it.

Next, John Boehner: words, words, words. On one hand, the Tea Party presses him for more spending cuts. On the other, Democrats in Congress have come out with a new Web site to taunt the speaker, whenarethejobs.com. You‘ve got a ticker, 35 days and counting since Boehner has had the gavel, below, a counter on the number of job creation bills so far, a big red zero.

And herein lies the problem for Boehner. Can Republicans continue to say they will create jobs if they can‘t pass anything that does it?

Finally, get ready for a double take. Here‘s American actress Meryl Streep, the best in the business, I think, in character, with a side-by-side with former British Prime Minister Margaret Thatcher. She‘s doing it again. Remember Julia Child? Well, this one is downright perfect. Streep‘s movie, it‘s called “The Iron Lady,” of course, is set to hit the theaters later this week.

And, actually, I met the former Prime Minister Margaret Thatcher. And she was very nice, not at all an iron lady.

Up next: Why are so many on the right coming out against those pro-democracy protesters in the streets of Cairo? They say they‘re for “democracy”—in quotes. Why are they against it in practice? And why are they backing the regime that is opposing democracy still?

Stocks seesawing to a mixed close—the Dow eking out a nearly seven-point gain to extend its winning streak to eight in a row, the S&P 500 slipping 3.5 points. The Nasdaq gave up about eight points, but the big story of the day on Wall Street was the parent company of the New York Stock Exchange in advanced merger talks with the owner of the German stock exchange, the Deutsche Boerse. That news came as the London and Toronto exchanges announced their own merger that could create a majority—a major new trading center for mostly the mining shares.

On the earnings front, Coca-Cola delivered better-than-expected results on a 6 percent jump in their sales last quarter. Polo Ralph Lauren shares soaring about 8 percent on a huge spike in holiday sales topped by an upbeat forecast.

And networking giant Cisco reporting after the closing bell that the shares are tumbling after hours on lower profits and weaker-than-expected gross margins.

That‘s it from CNBC, first in business worldwide—and now back to Chris and HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Demonstrations in Egypt entered their 16th day, believe it or not, with protests and strikes spreading across the country. But the patience of the Mubarak government is wearing thin, and Vice President Suleiman has ramped up his rhetoric against the opposition in the streets.

For more, let‘s turn to NBC News chief foreign correspondent Richard Engel, who is over there now.

I guess I‘m absolutely flabbergasted. I watch your over there. You‘re so courageous. You‘re covering this story better than anybody in America, in the world, I think. And I still don‘t understand the options. What do you see coming in the months ahead between now and September? Is there any clarity to the options we see here?

RICHARD ENGEL, NBC CHIEF FOREIGN CORRESPONDENT: The main problem right now—and thank you for that very nice introduction—is one of not only constitutional—a constitutional crisis. That‘s what Egypt keeps saying, that it‘s not so simple, that we can‘t institute all these reforms so quickly. Mubarak can‘t just step down. It would send the country into chaos. That‘s what the government is saying.

And it says that it‘s formed this commission to work out these constitutional reforms, and that it will take time, but don‘t worry; we‘re working on it. The government‘s—that‘s the government‘s line.

MATTHEWS: Right.

ENGEL: The protesters say, you know what? It‘s very easy. Mubarak just resigns, he steps down, he hands the power over to someone else.

We have been talking to professors, analysts, lots of former diplomats, and they say a lot of this is about personality—personality. President Mubarak personally doesn‘t want to step down. He‘s very stubborn. He believes firmly in his heart of hearts that he‘s the only person that is keeping this country together and preventing the Muslim Brotherhood from stepping over, and that they don‘t want to set a precedent, that, if the government just steps down, that, in a year, two years, three years, if there‘s another crisis, people will go back on the streets and topple the government.

So, they are trying to find a way out of this, but the government‘s

options are getting more and more limited. The people on the street don‘t

believe them when they say, give us time to sort out the Constitution and -

and—and give us the months to get the professors and the experts together, so we don‘t have a legal crisis.

MATTHEWS: Trying to carve out something in the middle I guess is impossible. You must think about it all the time.

Is there a middle solution, where you have some kind of real guarantee of an open selection come September, so you have the normal political campaigns and organization, which would have to take this many months to get organized? I mean, if they want real political parties, real options, some sort of runoff system or whatever, wouldn‘t they need this time to September to have an election, a real one?

ENGEL: They probably would.

And the protesters themselves agree, we need time. And they are—most of them aren‘t calling for snap elections to take place in the next few days. It is about Mubarak. And they think, unless Mubarak personally goes, that the process won‘t change, that they won‘t have the liberty, they won‘t have the momentum to organize elections.

So, it‘s not about time. It‘s about Mubarak. Some people are saying that Mubarak should go on an extended medical leave to Germany.

MATTHEWS: Yes.

ENGEL: And we have been told by diplomats that that option is on the table, but Mubarak personally won‘t go.

If he left, if he went to Germany, constitutionally, it becomes much easier, because then he‘s not really being forced out of office. He‘s not stepping down. He didn‘t die. He‘s just on a leave of absence, and can hand over power to somebody else.

That is considered a middle—a middle ground. But, again, he‘s stubborn. He doesn‘t want to go. And he feels that he really shouldn‘t go, that it wouldn‘t be in the country‘s best interest.

CHRIS MATTHEWS, HOST: Thank you so much, Richard Engel. I meant every word, you‘re the best. Thanks so much for joining us once again on HARDBALL.

Well, we got a new poll back at home that shows that nearly 40 percent of Republicans think the protests in Egypt will have a negative effect on our country. While just 8 percent think the demonstrations will be beneficial, just less than one—one in 12 Republicans think is it‘s good. The Democrats are even split on what they see over there. They see the murkiness for what it is, I think.

Eugene Robinson is an MSNBC political analyst and, of course, a Pulitzer Prize-winning columnist for “The Washington Post.”

Gene, I guess this is like an ink spot, you know, Democrats—progressives, if you will, look at it and they go, you know, democracy is not so bad, I‘ll take my bets, I‘ll bet. It‘s a 50/50 proposition.

Republicans see the streets, demonstrators, they go—it‘s the ‘60s here again. These are the bad guys.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: I think that‘s one of the ways it cuts, Chris. I think it cuts other ways as well. There are people whose principal foreign policy concern is Israel, for example.

MATTHEWS: Yes.

ROBINSON: And, you know, (INAUDIBLE) -- since Mubarak is the guarantor—

(CROSSTALK)

MATTHEWS: They split. They‘re the guys who are the most, if you will, a hawkish, the most Likudnic (ph). Some of them say the best thing is to break up these old oligarch, these old monarchies and have real elections, because that‘s a pressure cooker that eventually break anyway. We need democracy.

Then there‘s others who say, well, hold on and look out for an ally, I guess.

ROBINSON: Well, you could look at—historically, you could say that perhaps—well, not perhaps—that there is more of a Republican tendency to say, “You know, let‘s go with the dictator we know rather than the mob we don‘t know, the democratic mob that we don‘t know.”

“Sixty years ago, American politics was embittered by an accusation couched as a question: ‘Who lost China?‘ It is a sign of national maturity that fewer American complainers are today faulting the Obama administration for not anticipating and shaping events in Egypt. Israel, which lives next door to Egypt and has an excellent intelligence service, did not see this coming.”

So, all this browbeating, and I‘ve been part of it, but here‘s a conservative guy, a real Tory, you know, George Will, saying, you know, lighten up, give Mubarak a chance and let the streets vote.

ROBINSON: It was hard for a lot of people to see this coming. There has been a group of scholars, think tank people here in Washington sort of working on this for some time, and they did come and a number of reports saying watch Egypt, watch Egypt.

MATTHEWS: OK. You know, in my opinion, when I here Mubarak has coked away $1 billion or $70 billion, that‘s kleptocracy. That‘s not patriotism. That‘s looting your country. I can see storing away a few walnuts for the cold winter when you‘re ahead, but stealing billions?

ROBINSON: We‘ll also go beyond that, the whole kabarat (ph), secret police who as we speak are probably beating people in dungeons. I mean, that‘s the way the regime works, is what the way it always work. It‘s going to continue to work until Mubarak get out.

Up next: House Republicans want to make it harder for women to get abortions. But isn‘t this a push by the right to outlaw abortions altogether? This is troublemaking from what I can tell. I want to look into it. I‘ve tried to figure it out.

We have the law on the book, a woman‘s right to choose. We have a law on the books, no federal money for abortion. That‘s the status quo. Why aren‘t we sticking with it?

MATTHEWS: Just one month after being shot, Congresswoman Gabrielle Giffords is making a remarkable recovery. Her aides say she‘s now talking more and more. And on Monday, she asked for toast with breakfast at her hospital bed. She‘s out there. She‘s getting hungry.

Doctors say she‘s recovering at lightning speed. And they hope she‘ll be able to travel to Cape Canaveral in April when her husband, Mark Kelly, commands a final flight of the space shuttle Endeavour. What a couple there. What a great American couple.

HARDBALL will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARBARA BOXER (D), CALIFORNIA: We‘re here today to send a clear message to our Republican colleagues on the House side. Your agenda on women‘s health is extreme, it breaks faith with the decades-long bipartisan compromise, and according to medical experts, your agenda risks the health and the lives of women.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL.

That‘s Senator Barbara Boxer yesterday, making clear that House Republicans are planning bills to restrict the women‘s rights to choose an abortion will face fierce opposition on the Senate side.

Just to clarify this issue as much as I‘ve been able to—there is a long-standing sort of bright line. And you may not like it, a lot of pro-life people don‘t like it, pro-choice people don‘t like it. But it‘s basically a woman has the right to choose within some restraints under the Roe v. Wade decision of the Supreme Court in 1973, and also because the Hyde Amendment which is getting passed generally every year, the government is not going to pay for abortion. So, that‘s sort of like the way it works, you have a right to choose, but the government is not involved in it in terms of financing it.

Why are—why is this border that had been sort of respected changing now? What‘s going on?

REP. DIANA DEGETTE (D), COLORADO: So, Chris, just at the time when Americans care about jobs and the economy, the Republican leadership in the House has made one of their first three bills to be a bill that says to women, you now can‘t buy abortion coverage, you can‘t buy full reproductive coverage in these health exchanges, or even in the private insurance market. This is an extreme and divisive bill that goes so far behind what we‘ve ever seen before.

It would basically say people can‘t get tax credits if they offer health policies that give full reproductive services. So, it would—it would—it would reduce people‘s rights to health care and it would actually raise taxes.

Why are they doing this? I think it shows their true colors, which is they‘re trying to cater to the far right.

MATTHEWS: What would happen if this were to be law? I don‘t know if it would pass the Constitution in terms of the Supreme Court, but if you were able to say you can‘t buy health insurance that includes coverage for abortion, even if it‘s your own money or whatever, because we don‘t want you to, therefore, we‘re going to outlaw it. But would that mean the insurance companies would just stop providing that kind of coverage? What will be the effect do you think?

DEGETTE: Right. Here‘s what would happen, Chris, is right now, employers and some employees get tax deductions or tax credits for offering insurance to their employee. These insurance policies give a full range of reproductive care for women. So under the bill, even those companies and the new companies coming in, if they wanted to offer pre-reproductive care, they couldn‘t get a tax credit.

MATTHEWS: OK.

DEGETTE: What that would mean would be that insurance companies would just simply stop offering insurance policies that covered abortion—

MATTHEWS: I think every woman out there knows exactly what we‘re talking about.

DEGETTE: Yes.

MATTHEWS: Let‘s talk about this thing, 358, the other bill that‘s about—you know, if you—a woman is in a car accident.

DEGETTE: Right.

MATTHEWS: She‘s pregnant. She‘s, say, eight months pregnant, seven months pregnant. The doctors decide that her life is in danger if they continue with the pregnancy. These cases fortunately on our life don‘t happen that often, but when they do, the hospitals are—under current law, I‘m told—required whether they‘re Catholic or whatever, they have to perform the surgery.

Now, what would this new legislation do?

DEGETTE: Well, you know, both of these bills are absolute riddled with little landmines like this. They redefine rape to be forcible rape, they redefine incest, and the one you‘re talking about says that if a woman comes into a hospital, a pregnant woman, and she would die if she didn‘t have an abortion, if the hospital or the doctors are against it for reasons of conscience, then they wouldn‘t have to save the mother‘s life.

I mean, that‘s just appalling to people and is of quite concern.

MATTHEWS: Is this—look, I‘m with you on this issue because I think a woman in that kind of situation should be protected. Her rights to live should be protected.

MATTHEWS: But don‘t most hospitals—aren‘t all hospitals required to give that kind of emergency treatment right now? No matter what the hospital‘s religion.

DEGETTE: You know, I believe in a Conscience Clause. I think it‘s important. But under current law, if a woman comes in and she‘s going to die if she doesn‘t have the medical service, then they have to provide that have medical service. This new legislation would eliminate that law. So, it would now say—

MATTHEWS: Well, why would someone want to do that?

DEGETTE: Because they don‘t value the life of the mother. That‘s why. I mean, it‘s—

MATTHEWS: So, let‘s get back to reality here. I know the Republicans, Chris Smith—I respect the guy, disagree with him on the way in which he goes about these things—I do as a Roman Catholic respect life. I accept that as a teaching authority of my church.

When it comes to the Constitution, I think we can read the Constitution as it‘s been interpreted by the Supreme Court, it is, in fact, the law of the land. We live in a society that‘s run by law. You can change it if you want, but you‘ve got to do it a different way than this.

It seems to me what they‘re trying to do, Congresswoman, is get around the rights issue by making it just so darn difficult and finding these marginal ways to deny the opportunity, which should come with the right under the Constitution.

DEGETTE: Right. We had hearings both in the judiciary and in the House subcommittees today and yesterday, and basically, some of the witnesses for the proponents of the bill said their goal is to eliminate abortions in this country completely except for, in most circumstances, I guess, the life of the mother. And that‘s their real goal.

So, they figure if they can‘t do it through the courts, then what they‘ll do is they‘ll make it virtually impossible for anybody to get full reproductive services. As I said, it‘s really extreme. And by the way, Chris—by the way, next week, they‘re planning to have a vote to eliminate the family planning money that goes to many organizations.

MATTHEWS: I‘m glad to hear to your colleague is doing so much better out there.

DEGETTE: Thanks.

MATTHEWS: When we return, “Let Me Finish” with the global impact of Bill Clinton. What a story. I call him “President of the World” because he is. It‘s a subject of the new HARDBALL documentary coming out that we got. Next, I want to talk to you about it.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: “Let Me Finish” tonight with our historic documentary on President Clinton. It‘s been an extraordinary undertaking on our part, but to be honest—no more or less extraordinary than this subject.

Other American presidents have done things before after leaving office, but nothing on this level, or with this planetary scope. We call this documentary “President of the World” for a reason.

Bill Clinton has taken the prestigious of his time in office, his relationships with other heads of state and forged something never known before, a global force for good. He‘s fighting AIDS in Africa, the devastation of floods and earthquakes, and nearly every other challenge facing mankind on of the face of the globe.

When you see it all put together, you‘ll believe what a phenomenon, what a story that‘s here that hasn‘t been covered in its real dimension, power and positive force. At a time when U.S. influence is being questioned around the world, he‘s proving what one person can do—helping people in trouble, showing America, our exceptional country, at its exceptional best. This is not.

And those who watch the night of Presidents Day will see it about the usual partisan politics. But it does have a political impact. It‘s about a leader of our country doing real good in the world and making good for our country in the bargain.

I traveled with former President Clinton to Ireland, for example, joining him on a return to one of his great triumphs in office, the Northern Ireland Peace Accord. I can‘t think of a story that means more to me. And I also know firsthand a member of my family was involved in the great work of the Clinton Global Initiative against AIDS in Africa.

Well, what you see in our documentary, “President of the World,” is the product of a lot of work by our producers. I honestly believe you‘ve never seen anything like it, if for no other reason we‘ve never had a world leader like this before.

Bill Clinton, “President of the World,” here on MSNBC, the night of Presidents Day, February 21st at 10:00 p.m. Eastern.

I‘m asking you—don‘t miss an extraordinary look at a committed, wildly impressive American doing something, living a life no one has before.

That‘s HARDBALL for now. Thanks for being with us.

More politics ahead with Cenk Uygur.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.